PROMOTING ENVIRONMENTAL MANAGEMENT IN DUTCH SMES
POLICY IMPLEMENTATION IN NETWORKS
THEO DE BRUIJN
KRIS LULOFS
Dr. T.J.N.M. de Bruijn / Dr. K.R.D. Lulofs
CSTM University of Twente
PO Box 217, 7500 AE Enschede, the Netherlands
phone +31-53 489 3203 / fax +31-53 489 4850
e-mail: [email protected] / [email protected]
Paper presented at the workshop:VOLUNTARY, COLLABORATIVE AND INFORMATION-BASED POLICIES:
LESSONS AND NEXT STEPS FOR ENVIRONMENTAL AND ENERGY POLICY IN THE UNITED STATES AND EUROPE.
Harvard University, John F. Kennedy School of GovernmentCambridge, MA USA, May 10-11 2001
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 1
PROMOTING ENVIRONMENTAL MANAGEMENT IN DUTCH SMES
Policy Implementation in Networks
Theo de BruijnKris Lulofs
1 Introduction
The concept of sustainability presents an enormous challenge for industry. Where in the past a sound
economic performance ensured survival, in the near future the triple-bottom-line will determine whether a
company is successful or not. Next to outstanding economic results, companies will have to minimize en-
vironmental impacts and pay full attention to social aspects. Over the years, environmental management
has therefore developed into a strategic issue for companies. The concept of sustainable development
implies that environmental management in organizations has to go beyond compliance to regulation. As-
pects such as waste minimization and life cycle analysis are becoming more and more part of environ-
mental management. Moreover the environment is no longer the sole responsibility of governments.
Companies and other organizations have to take up their share of responsibility. Throughout Europe one
can witness a movement that blurs the lines between governments and private actors. Shared responsi-
bility, one of the key principles of the Fifth Environmental Action Program 5EAP of the European Union
(CEC 1993), was born out of a notion that none of the partners involved (governments, industry, NGOs or
the general public) has the capacity on its own to bring about the changes needed. Shared responsibility
is seen as crucial in achieving sustainable development. Therefore key elements in modern environ-
mental policy are collaboration and interaction (Hartman et.al. 1999). Creating interaction among the main
groups of actors including governments, public and private industry and the general public encourages
collaboration.
The cornerstone of current Dutch environmental policy is the National Environmental Policy Plan. This
plan aims at radical changes in order to make environmental problems manageable within the next 25
years. This means for instance that emissions of the most heavily polluting substances must fall by 80-
90%. This can not be achieved with conventional policy-instruments only. Dutch environmental policy
nowadays is being created through a process of close cooperation between government, the business
community, NGOs, and other actors (Bressers and Plettenburg, 1996). One of the main goals is to create
an atmosphere in which industry itself will take initiatives and not only respond to governmental action.
Shared responsibility, as advocated by the European Union, is very much a central perspective in Dutch
environmental policy. The policy program on environmental management is an example of this new policy
approach.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 2
In this chapter the policy program on environmental management in the Netherlands is being analyzed
and evaluated. It was a voluntary program aiming at all Dutch companies that ran from 1989 until 1995.
Adapting environmental values and the implementation of environmental management systems in SMEs
were thought to be important steps in the transformation process towards sustainable companies. Instead
of dealing with SMEs directly, the Dutch government tried to facilitate and manage the formation of net-
works in which intermediary organizations were expected to act as agents for change. The program can
be seen as tool to increase the commitment of industry and to further the institutionalization of environ-
mental management into environmental management systems. Although also direct environmental im-
pacts were aimed for, the general idea was to generate mutual trust for government-industry collabora-
tion, to enhance capacity building within industry, to involve third parties and build networks. From the
start this trajectory was planned as a long-term strategy without very articulated goals at the time and
therefore open to policy learning.
We studied the effectiveness of the network configuration in the Netherlands between 1990 and 1996. In
this chapter we highlight some of our findings (see also De Bruijn and Lulofs 1996, 2000). In section 2 we
describe the central elements of the Dutch policy program on environmental management. In section 3
we analyze the effects it led to in terms of company attitudes and behavior. The basic question in these
sections is whether the network approach is valuable in reaching for sustainability within industry. We try
to explain in section 4 why the program was relatively successful. Crucial factors are found in the wider
policy approach and the fit with the general mediating policy style of the Netherlands, and the high level
of public concern over environmental matters during the early 1990s. We end the chapter with section 5
in which we evaluate the prospects of the network approach in the light of its effectiveness for transform-
ing SMEs.
Our main conclusion is positive concerning the effectiveness of the network approach. At the same time
we conclude that the context in which the policy program has been implemented, and especially the close
connection with co-regulatory and regulatory paths, has been a crucial factor in this.
2. The Dutch policy program on Environmental Management
The basis for environmental policy in the Netherlands was laid in the early seventies. In 1972 the Ministry of
the Environment was installed. With some urgency media-specific environmental laws were formulated de-
pending on command-and-control mechanisms. Since the 1980s there is a strong development towards
integration (OECD 1995: 32; Liefferink 1997: 218), resulting in 1989 in the first National Environmental
Policy Plan. This plan is the cornerstone of current Dutch environmental policy1. The first plan aimed at
radical changes in order to make environmental problems manageable within the next 25 years. The pub-
1 It is published every four years. NEPP-4 will be published soon.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 3
lication of the ambitious NEPP coincided with a growing lack of confidence in the traditional policy ap-
proach with its emphasis on direct regulation (Bressers and Klok 1996). This is one of the reasons for the
Dutch government to broaden the mix of policy instruments in order to reach for shared responsibility.
The policy program on environmental management is one of the examples of the new approach.
The central concept underlying environmental management is to stimulate the companies' own respon-
sibility and activity. This should improve the responsiveness, capacity and capability of SMEs. In 1989,
the Ministry of the Environment in the Netherlands published the Memorandum on Environmental Man-
agement (TK, 1988-1989, 20633, nr.3). The objective set by this Memorandum was that companies in the
Netherlands should have introduced an environmental management system by 1995. It was however a
voluntary program. No sanctions were set in the short run for companies who wouldn’t implement man-
agement systems, other than stating that they might be subject to more and severe enforcement2. The
basic philosophy was to convince companies of the usefulness of environmental management by ex-
plaining its central concepts and offering concrete support during implementation.
In the memorandum a distinction was made between the (few) larger companies and the main group of
SMEs3. To reach for SMEs, the Memorandum presented a program of activities. This program was based
mainly on the acquisition of specific knowledge through research and sample projects, for instance per
sector of industry. This knowledge could then be disseminated among companies through guidance and
education. By supplying information, attempts were made to stimulate the actual introduction of environ-
mental management into the companies. The underlying idea was that by offering support, the uncert-
ainty and therefore the costs to the individual companies could be reduced to such an extent that they
would actually proceed with introducing environmental management. Intermediary organizations were
asked to play a special role in this. They were responsible for keeping in touch with the individual compa-
nies. Policy implementation therefore took place in two distinct phases. In phase 1 the ministry stimulated
intermediary organizations to translate the concept of environmental management into concrete actions
for specific target groups. In phase 2 companies were expected to implement these actions into their daily
management practices (with the help of intermediary organizations) in order to establish environmental
management systems.
Thus, instead of dealing with SMEs directly the (central) government tried to facilitate and manage the
formation of networks and tried to enable those networks in their attempts to reach for individual compa-
nies. The networks aimed for, in which for instance trade associations played an important role, were be-
lieved to be better capable than the government alone (cf. O’Toole 1990). The government anticipated
that the necessary mutual respect between network-organizations and the target group might be higher in
2 In 1995 the ministry published a note in which the importance of environmental management for the relationship between regula-
tors and companies was stressed. Companies who had implemented a certified management system could qualify for a lighterand more flexible permit and enforcement regime (VROM 1995).
3 The memorandum mentioned 10,000-12,000 larger companies, and 250,000 SMEs.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 4
such an arrangement, as was the accessibility of the target group. The intermediary organizations were
responsible for keeping in touch with the individual companies. In order to guide the implementation of
the policy program a special Program Office was established within the environmental ministry. It admin-
istered the funds available (especially for phase 1)4, tried to coordinate all activities and evaluated those.
To this end an archive was established that we have used extensively for our research.
The policy network concerning environmental management consisted of various partners5:
The main role was foreseen for the trade associations. They had to convince their members (and possibly
also non-members), help them actively by providing handbooks and courses, and use their position of
authority and power to force them into environmental management. A second important category was
formed by the Industrial Environmental Agencies (Dutch acronym: BMD). These organizations were set
up especially for the introduction of environmental management in SMEs. They had a regional perspec-
tive and were mainly supposed to motivate and support companies. They were expected to deliver a kind
of first aid. In cases of complex problems they were supposed to call in specialists (possibly an innovation
center or a consultancy firm). The BMDs were also expected to make use of the material that trade asso-
ciations had developed for their specific sector of industry. Spread all over the country there were some
twenty BMDs, set up in general by Chambers of Commerce. Jointly they developed their own method for
implementing environmental management. Municipalities were expected to support the activities of the
trade associations and the BMDs for the companies within their borders. The idea was that they would
adjust their permits and inspections to the level of environmental management in a company. Labor Un-
ions were expected to inform their members and thus to create support on the shopfloor. Workers play an
important role in adequately implementing and maintaining environmental management. They are in-
volved in the daily management of substance flows within the company. So, employees are the key to
improving the environmental performance. Labor unions were expected to raise consciousness amongst
workers. Consultancy agencies could be valuable in assisting companies with the implementation proc-
ess of environmental management. Finally the Ministry of the Environment saw a motivating task for
themselves. And of course they co-financed some of the activities of the other network organizations.
In order to model the different activities of intermediary organizations we have developed a framework
based on the subjective rational actor model (cf. Bressers and Klok 1988). The course of interaction pro-
cesses is explained in this model on the basis of the motives of the actors involved, the resources they
posses and their position of power. The activities of intermediary organizations within a policy network
can aim at these three dimensions, hence they can perform three functions. We may speak of a persua-
sive function when a network organization tries to influence the motives of the dominant coalition within
companies with regard to environmental management. Network organizations have to convince this
4 Almost 22,5 million Euro was available. A third part went to branch projects, another third to the establishment of BMDs.5 This characterization was done by secondary analysis of the policy documents, by interviewing core officials that were responsible
for implementing the stimulation policy and by observations in the four sectors of industry that were analyzed.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 5
dominant coalition of the relevance of environmental management and improvements in their environ-
mental performance. We speak of a supporting function when a network organization tries to increase the
resources of companies by helping them with implementing environmental management and the meas-
ures needed for improvements of the environmental performance. This involves supplying model ap-
proaches, guidelines and manuals and offering courses and training. We speak of a repressive function if
the network organization is intended to steer the unwilling members of the target group in the desired di-
rection through gentle or hard pressure. Performing a repressive function means acting out of a position
of power. The above is summarized in figure 1.
motives persuasive motives
resources supportive resources SMEIntermediaryorganization
power repressive power
Figure 1: The three network functions between SMEs and intermediary organizations
The basic assumption of a network approach is that as the intended network relations are exercised to a
greater extent, companies will show a more positive attitude and carry out more of the activities asked for.
Table 1 summarizes the network organizations and their expected functions.
FunctionActor
Persuasive Supportive Repressive
Trade Association X X X
BMD X X
Municipality X X X
Labor Unions X
Consulting Agencies X
Central government X
Table 1: Network organizations and their functions
3 Implementation of the policy program and its effects
Phase 1: Construction of the policy networkAs explained in the previous section, policy implementation took place in two distinct phases. During
phase 1 the construction of the policy network stood central. Most of the funds available were used to this
aim. Intermediary organizations could submit proposals for projects. Once approved, about half of the
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 6
budget could be covered by the ministry. Between 1989 and 1996 162 projects have been implemented
(VROM 1996). 55 projects concerned initiatives by trade associations and some 20 BMDs have been
established. The first question we asked ourselves was whether this meant that the different functions by
the network organizations were realized to the perception of our respondents6. Of the 11 hypotheses (one
for each expected network function) only one had to be rejected. Only the persuasive function by the la-
bor unions had not developed. Based on these data, we feel it is safe to conclude that a real network has
been built over the years. Below we give an example of the concrete activities of one trade association.
The Royal Dutch Association for the Printing and Allied Industries (KVGO) represents the companies in
pre-press, printing, binding and print finishing industry. KVGO acts an agent for its members and offers
support on various issues. KVGO has a bureau where almost 80 people work. Some of them have envi-
ronmental expertise. The printing industry is well organized: almost 90% of the companies is a member.
KVGO started up an environmental management project together with another associated trade associa-
tion. Together they founded a special foundation (Dutch acronym: SIMZ) that would take care of the in-
troduction of environmental management within both sectors. SIMZ developed several handbooks that
could be of value to individual companies. First of all they developed a handbook on environmental man-
agement (SIMZ, 1993). This handbook consists of three sections: Organizational aspects, legal aspects
and technical aspects. Most emphasis was put on the organizational design of an environmental man-
agement system and compliance. The technical aspects were extensively covered in the Handbook Envi-
ronmental Measures (1993). SIMZ also developed a scheme by which the model could be implemented
by individual companies. This scheme foresees in courses and individual support. Regional information
meetings had to attract the attention of companies. Special projects were organized with other partners,
such as provinces and municipalities. SIMZ also carried out so-called pre-audits. This audit is voluntary
for companies that collaborated in the environmental management project. The procedures and contents
resembled that of a ‘real’ audit, but was less costly.
Phase 2: Developments within companiesBetween 1990 and 1996 we closely followed the effects these and other efforts by partners in the policy
network. We have analyzed and also partly participated in environmental management projects, both by
network partners and at the level of individual companies. We also stood in close contact with the Pro-
gram Office of the ministry. We have looked at four sectors of industry in particular: the chemical industry,
the printing industry, synthetics processing industry and concrete products industry. Random samples
were taken from these four industrial branches. Out of the 343 firms we contacted, 141 (41%) cooperated
in our research. Our main research question was whether the new policy approach was successful. For
this purpose we gathered data on 200 variables per company covering the way companies responded to
incentives out of the network and the internal barriers they had to deal with. In our analysis we tried to
6 They were asked to evaluate the existence of a specific function on a 10-point scale. The average score was used to test the es-
tablishment of the various functions.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 7
explain the level of progress of companies and the attitude they have towards environmental manage-
ment. The main explanation was looked for in network activities. Below we highlight some of our findings.
First, we have determined the level of progress of implementing environmental management in the com-
panies. The variable ‘progress’ comprises two aspects. First we determined to what extent the companies
had implemented an environmental management system. This is seen as an indicator for the progress on
an organizational level, indicating a growing commitment and responsibility. Secondly we’ve determined
the amount of technical measures taken on environmentally relevant issues within a company. After all,
sustainable environmental management is more than just an organizational matter. Earlier we mentioned
that the program did also aim at direct environmental improvements. We have combined these two as-
pects to an index for the level of progress of environmental management within the company. The ‘inac-
tive’ companies have developed few or none elements of an environmental management system and
have taken hardly any concrete measures to minimize their environmental burden. The ‘advanced’ com-
panies are the opposite of this: They have developed all or nearly all elements and have also take a lot of
measures. Table 2 shows the distribution of the companies on the variable progress. The found level of
progress is reasonably comparable with the data found by the official evaluation studies (e.g. Heida et.al.,
1996)7.
Level of progress Percentage of companies
• Inactive 6
• Orientating 39
• Initiating 51
• Advanced 4
Table 2: The progress of environmental management in companies (in percentages)
The implementation of environmental management requires changes within the organization, or in other
words changes in the patterns of behavior of members of the organization. Moreover, the policy program
also aimed at changing the attitude towards environmental management within a company. After all, the
policy program was an important attempt by the Dutch government to reach for shared responsibility. The
dependent variable ‘attitude’ regarding changes in the rules of behavior can be placed on a continuum
ranging from acceptance to rejection of change. In our model, an attitude is formed by the combination of
the actor’s motivation, his resources and his position of power. To measure the attitude of the companies
we used a list of 20 items, each representing a different dimension of an attitude. Via the construction of
scales for each dimension, we were able to determine the attitudes of the companies. Table 3 gives the
overview.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 8
Attitude8 Percentage of companies
• Negative 23
• Indifferent 21
• Positive 56
Table 3: The progress of environmental management in companies (in percentages)
Research expectations were formulated about the positive relations between the attitude and the level of
progress of companies. These expectations proved to be true (Kendall tau-c = 0.42, T-value 5.84).
Explaining the resultsAt first glance you could say that the stimulation policy has been a quite successful given the fact that
these results were achieved in only a few years time. The main question however is whether the policy
program, implemented in a network configuration, is accountable for this. To this end we developed a
theoretical model in which the organizational framework stood central (i.e. by establishing the mesolevel
of intermediary organizations). The basic assumption was that as the intended network relations are ex-
ercised to a greater extent, companies will show a more positive attitude and consequently more meas-
ures will be taken. The research model is shown in figure 2.
Figure 2: Research model
To test this model we first of all looked at the degree of penetration of the different activities that were
carried out through the network. As said, network organizations (and especially trade associations) were
supposed to develop model-approaches, handbooks, courses, meetings, etc. Table 4 summarizes the
main findings on how companies perceived these activities. The outcomes point out that the activities in
the network were certainly noticed by the companies.
7 Because the policy program was voluntary, the ministry wanted to follow closely its implementation process and the effects within
companies in order to review its success. Several evaluation studies were carried out to this end.8 In our analysis we distinguished between five different attitudes. For this chapter we have summarized these in three main catego-
ries.
Environmental management• Progress
• Attitude
Network Activities
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 9
Network indicators Percentage of companies
• Familiar with terminology 92%
• In possession of the supporting material 62%
• Attended informative meetings 54%
• Implementation supported by the network 43%
Table 4: The degree of penetration of the network activities (in percentages)
Next, we determined the frequency of contacts between network organizations and the company. Fur-
thermore we looked at the relation between the different network functions and the attitude. Each relation
proved to be positive and significant (Table 5). This means that as network organizations are more active,
companies show a more positive attitude towards environmental management and are more advanced
with the implementation of it.
Indicator Relation
• Frequency of contacts Kendall tau-c = 0.18, T-value 1.99, sig-nificance: alfa approximately 0.02
• Persuasive function Kendall tau-c = 0.27, T-value 3.08, sig-nificance: alfa approximately 0.00
• Supportive function Kendall tau-c = 0.24, T-value 2.29, sig-nificance: alfa approximately 0.01
• Repressive function Kendall tau-c = 0.16, T-value 1.71, sig-nificance: alfa approximately 0.04
Table 5 Network relations
These findings indicate that the network activities seem to have influenced the developments within com-
panies. In order to get a better grip on this relationship, we carried out several regression analyses9. We
used indicators of network activities as explanatory variables. These indicators covered the relations be-
tween network organizations and companies. Only indicators for the activities of trade associations and
the Ministry of the Environment proved to contribute substantially to the explanation. Activities by other
organizations in the network didn’t add to explaining the development within companies. In total, network
indicators could explain however only 22% of the variance in our dependent variables.
9 Through regression analyses one can determine the relation between a dependent variable and several independent variables (Y
= a +β1X1 + β2X2 + … + βnXn + e). This gives an estimate of the explanatory power of independent variables. We excluded vari-ables from the regression equation that explained less than 1% of the variance of the dependent variables. The level of signifi-cance of β was 0,10.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 10
Broadening the explanationThe explanation offered by the network indicators was not satisfactory. Therefore, we also looked at (in-
ternal) factors in order to explain why certain companies were further advanced and stood much more
favorable to environmental management than others, see figure 3.
Figure 3: Research model
Out of a multitude of variables five variables proved to contribute significantly to the explanation. First of
all companies that had a good internal communication structure achieved much better results. These
companies for instance had clear decision-making rules and regular job consultations. Second, compa-
nies that already had environmental expertise before the implementation of the policy program started,
proved to be much more advanced. For one thing they were able to respond to external pressures. A third
explanatory variable was the level of profitability. Companies clearly need enough resources to work on
environmental management. The level of competition was our fourth explanatory variable. Companies
that are facing a very tough competition may lack the time to work on environmental management prop-
erly. The fifth and last variable was the nature of the immediate surrounding. Companies located within
residential areas tended to be further advanced than companies on remote industrial estates.
Taken together the network and internal variables can explain 58% of the variance in progress and atti-
tude of the companies. Table 6 summarizes the variables that had significant explanatory power. It is im-
portant to realize that the specific variables that can explain why certain companies are more advanced
and stand more favorable towards environmental management may be different in different settings (e.g.
different national contexts).
Explanatory variable Explanatorypower
Network indicator • Activities of Trade Association• Activities of Ministry of Environment
14%7%
Internal characteristic • Adequate communication structure• Environmental expertise• Profitability• Level of competition• Immediate surroundings
12% 9%10%6%-
58%
Network ActivitiesEnvironmental management• Progress• Attitude
Internal Characteristics
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 11
Table 6: Explaining the progress and attitude of companies
Based upon our results we may conclude that it is the interplay between external pressures and internal
characteristics that enables companies to move forward. Companies with environmental expertise (e.g.
visible in the presence of an environmental coordinator) may for instance be better equipped to recognize
external pressures, especially in cases like ours where the implementation of environmental management
was voluntary in the end.
Trade associations proved to be by far the most influential actors in the network. Newly established or-
ganizations, like for instance the BMDs, were not influential at all. The pro-active and influential role of
trade-associations with regard to environmental affairs has recently also been observed in the USA (Nash
1999).
Still it is obvious that other, company specific factors can specify the exact influence of network relations.
Stimulating companies out of a network configuration is therefore not the ultimate solution. We should not
forget however that most of the internal characteristics of a company in itself do not evoke changes. What
they can do is making a company more receptive for external stimuli. For instance: Making profits will in
itself not transform a company into a more environmentally friendly production organization. Enough fi-
nancial room will however enable companies to invest in environmental management. External pressures
or stimulation may be the push needed under such circumstances. Therefore we still feel the stimulation
policy was successful.
4 Broadening the explanation to the context of the program
The policy program on Environmental Management was a reasonable success. In this section we will try
to understand why the program was successful by sketching the context in which the policy program was
implemented. We will show that the policy program was not an isolated one, but highly integrated in a
new policy approach that has developed during the last decade. We will also show that the program gave
a close fit with the new, mediating policy style that has developed during the same period. We believe
that this context contributed as much to the successfulness as the structure and contents of the program
itself. Below we will argue that traditional policy approaches couldn’t face the environmental problems of
the Netherlands, especially also when the level of ambition was raised. As a response a new policy ap-
proach developed in which voluntary programs and selfregulation go hand in hand with more coercive
programs.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 12
The Netherlands is a highly densely populated country facing high environmental pressuresOf all European countries the Netherlands is one of the smallest but with the highest population density10.
It has a comparatively large amount of industry, intensive farming and a fast growing infrastructure. There
is a strong competition for physical space between businesses, households, agriculture, traffic and nature
development. The system of physical planning was developed relatively early in order to prevent markets
from absorbing available rural and nature areas. Special is also the fact that a large part of the country
lays below sea level and that several major European rivers (Rhine, Meuse) have their mouth in the
Netherlands. From early days on people were forced to collaborate, for instance in Water Boards, in order
to fight the danger of floods (cf. Raadschelders and Toonen 1993; Van Hall et al. 1999). Maybe as a re-
sult a Dutch characteristic is the long tradition of governmental consultation with various groups in society
(VROM, 1997). The Netherlands may be described as a highly consensus-based community with a plan-
ning tradition covering a wide range of social and economic aspects. The so-called “polder-model” relates
to negotiations and agreements between government, industry and labor unions on issues such as com-
petitiveness, wages, tax-systems, and social security. The general policy style of the Netherlands may
therefore be described as a corporatist, active, comprehensive, consensual and pragmatic (cf. Van
Waarden 1995)11.
Traditional policy approaches gave disappointing resultsAlready since the 19th century there is legislation to prevent nuisance from industrial activities. Serious
cleaning up activities however started only in the 1970s, for instance in the fields of water pollution and air
quality. The style in environmental policies originally didn’t fit the mediating policy style. Legislation was
developed out of a distant, negative attitude towards industry and other target groups (Bressers and
Plettenburg 1997).Media-specific environmental legislation was developed depending on strong command-
and-control mechanisms. Environmental problems were seen as mainly hygienic problems within isolated
environmental compartments (water, air, soil, waste, etc.). Different laws and policies were formulated for
each compartment. The central instrument in Dutch environmental policy was the ban on performing any
environmentally harmful activities without a permit. Permits were therefore the most often used policy-
instrument. Lower authorities (mainly municipalities) were responsible for the employment of the instrument.
The complex, fast changing rules were however not understandable and not specific enough for SMEs. Be-
sides that, the monitoring of the rules by the public authorities and enforcement efforts, were not substantial
and not very effective. A lot of evaluation research indicated that the traditional policy instruments were to a
substantial extent ineffective (cf. Schuddeboom 1994).
10 The total area of the Netherlands is only some 41,000 km2 (EU-15: 3,193,000 km2). The population density in the Netherlands is
about 380 citizens/km2, where the EU average is 117 (Eurostat).11 Van Waarden distinguishes several sub-dimensions of policy styles: corporatist vs. liberal-pluralist vs. étatist; active vs. reactive;
comprehensive vs. fragmented; consensual vs. adversarial vs. paternalistic; pragmatic vs. legalistic.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 13
Numerous incidents ánd the concept of sustainable development called for new ambitionsThe 1987 report of the UN World Commission on Environment and Development (Commision Brundtland)
‘Our common future’ became very popular in the Netherlands. Part of this popularity can be understood if
we look at a number of environmental incidents at that time. We refer for instance to the highly visible
problem of acidification. The social impact of ‘Waldsterben’ was first strongly felt in Germany, however
gradually affected also the Dutch public opinion. Another example of major incidents are the numerous
cases of land contamination. More than a 1000 serious cases of land contamination were discovered af-
ter the first incidents appeared. Land contamination is a very serious problem if you take into account the
hydro-geological characteristics of the Netherlands. Pollution can easily reach groundwater levels and via
diffusion threaten drinking water supplies. Since space is very scarce every polluted piece of land consti-
tutes a major problem. In order to remove or isolate contamination a number of residential areas had to
be pulled down. The social impact of this might be illustrated by the fact that citizens occupied the city hall
and even held the mayor hostage. Waste incineration was also compromised (Lulofs, 2001). Dioxins were
found near waste incinerators and in diary products produced from milk delivered by cows grazing near
waste incinerators. These and other incidents led to a high level of public concern over environmental
affairs in the late 1980s. It prepared the political stage for an integral study on the state of the environ-
ment in the Netherlands. The resulting report was called in Dutch ‘Zorgen voor morgen’ (RIVM 1988)12.
This report became, in the context of high public concern, very influential. The policy response to the re-
port was given by the first National Environmental Policy Plan (NEPP), published in 1989. NEPP is the
cornerstone of current Dutch environmental policy. It aimed at radical changes in order to make environ-
mental problems manageable within the next 25 years. This means for instance that emissions of the
most heavily polluting substances should be reduced by 80-90%. The mediaspecific, problem-oriented
approach was, as in the RIVM study, left behind and replaced by a thematic one. For each theme table 7
indicates the objectives for the next 25 years.
Policy themes Targets (simplified)
• Climate change reduction of CO2 emissions by 20-30%
• Acidification reduction of SO2 emissions by 80-90%
• Eutrophication reduction by 90%
• Diffusion of toxic and hazardous waste reduction of emissions by 50-90%
• Waste disposal reduction of amount of waste dumped by 60%
• Disturbance reduction of the number of people significantly hindered by noise or odor by 70-90%
• Groundwater depletion reduction of affected areas by 25%
• Dissipation increased material intensity
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 14
Table 7: Dutch policy themes and targets
Efforts to avoid shifting environmental burden from one compartment to others (air, water and soil) be-
came an important base for the second generation of environmental policy. A fundamental principle un-
derlying NEPP is that the responsibility for reaching the environmental targets lies primarily with the target
group itself (Suurland, 1994). Furthermore, the polluter should pay for the costs to repair the environ-
mental damage caused.
The need for a new policy approachThe publication of the ambitious NEPP coincided with the growing lack of confidence mentioned already
in the traditional policy approach with its emphasis on direct regulation (Bressers and Klok 1996). From
this perspective it was inevitable that a complete rethink of the environmental policy strategy took place
(Bressers and Plettenburg 1997: 127). Our open economy and the membership of the European Union
limit however the possibilities to use financial incentives. The understanding also grew that the kind of
goals of NEPP required a change in more than one segment in product-chains. Therefore collaboration
between different segments had to be established. Because regulation usually only addresses one seg-
ment and financial incentives necessarily have to be limited, the understanding was born that the toolbox
for environmental policy should be expanded with more co-operative and voluntary programs. The new
ambitions and the lack of confidence in traditional approaches thus called for another strategy and style
than the authoritarian style that accompanied the use of direct regulation. The new strategy should aim
more specifically at eliciting private initiatives and shared responsibility. This approach is not only aiming at
achieving more broadly based support for government policy, but also recognizes that the know-how nec-
essary to reduce environmental pollution can be largely found at the polluters themselves. From this per-
spective industry is not only part of the problem but also part of the solution.
The new strategy leans heavily on more voluntary approaches. Voluntary agreements have become a
widely used policy instrument in the Netherlands. Not only are the most agreements (in absolute terms)
concluded in the Netherlands, but also is the instrument broadly used in various aspects and themes of
environmental policy (EEA 1997). The setting of targets at the state-level remains the exclusive responsi-
bility of the government (as employed in the NEPP). The target groups have a strong say in all further
stages of the policy process, once the setting of targets at the state-level has been done. In the so-called
target-group policy several sectors of industry participate in consultation and negotiating processes with the
authorities. The resulting agreement (covenant) specifies the targets for a sector of industry. Quite a large
number of the agreements are legally binding, which distinguishes the Dutch practice from others (EEA
1997). The trade association is an important actor during and after the negotiations. The target-group policy
(as a central approach in current Dutch environmental policy) brought the environmental policy field more in
line with the basically mediating national policy style (Liefferink 1997: 224). Over the years the authoritarian
12 The Dutch word ‘zorgen’ has a double meaning: The title of the report indicates as well ‘Concerns about tomorrow’ as ‘Taking
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 15
policy style with a distant, negative attitude towards target groups has therefore changed into a new ap-
proach designed to encourage self-regulation (Bressers and Plettenburg 1997: 116). Of course, direct
regulation also plays an important part in Dutch environmental policy today. But even here, consultation
with all the relevant parties is important. Instead of simply imposing legislation, the Dutch government
often concludes agreements with, for example, relevant sectors of industry regarding the implementation
of environmental objectives.
Self-regulation in a context of regulation and co-regulationThe policy program on environmental management was a voluntary program. As explained above, it was
however certainly not an isolated program. It was closely embedded in the total system of environmental
policy in the Netherlands. In this system regulation, co-regulation and self-regulation are all important and
coherent ingredients (cf. Lévêque 1996)13. Here we are approaching the core of arguments why this kind of
network implementation might produce positive results. In pure self-regulatory systems the environmental
objectives and measures are set unilaterally by industry. The drivers for industry can be found in regaining
confidence of customers and the public opinion. The central problem are free-riders and the lack of credibility
of such arrangements. Public regulation leads to bad timing and inappropriate measures from a business
perspective. It is the sheer difference between decision-making on central level and decision-making at de-
central level by the better-informed agent. The problems can be overcome by a comprehensive and balanced
system such as the Dutch one. The government decides on overall targets, industry gets a say on sets of
measures to achieve the targets. The gains for industry are increased flexibility and efficiency. In the Dutch
system of co-regulation free-riders will be forced in the end by the regulators to meet the same objectives as
participating companies. Regulators are obliged to take the covenants into account when issuing new per-
mits. From the government perspective there is also the benefit of having to concentrate on a smaller number
of laggards. Besides that, in this system of co-regulation the knowledge of the private sector is absorbed into
the public sector, and the speed of change is no longer determined by the laggards14.
Therefore, we have to acknowledge that the policy program on Environmental Management was no isolated
voluntary program, but a closely embedded approach in the total environmental policy system. The linkage
with the system of co-regulation is found in the covenants that are agreed upon with sectors of industry.
Those covenants not only render national environmental targets into targets for sectors of industry and indi-
vidual companies, they also contain agreements on elements of environmental management (systems). The
policy program was also a first step in a careful strategy aiming at capacity building within industry. With the
program on environmental management still running, the next step was introduced that tried to integrate envi-
ronmental friendly product-design into environmental management systems and environmental management
activities.
care of tomorrow’.
13 In a situation of self-regulation the regulation is the result of a collective action and a bargaining process between firms. Co-regulation is hybrid form between self-regulation and public regulation.
14 We are not proclaiming that the Dutch system, in which the targetgroup policy stands central, is an overall success, althoughcertain successes cannot be denied. See also the chapter by Hofman and Schrama.
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 16
In conclusion, one can observe a strong development towards integration and shared responsibility in the
Dutch environmental policy system since the late 1980s (OECD 1995: 32; Liefferink 1997: 218). Dutch
environmental policy nowadays is being created through a process of close cooperation between gov-
ernment, the business community, non-governmental organizations (NGOs), and other actors (Bressers
and Plettenburg, 1996). The introduction of the strong neo-corporatist traits of the Dutch society into the
environmental field introduced a multi-level approach in which top-down and bottom-up interaction be-
comes interconnected. Beside the macro-level (national government) and the micro-level (SMEs) the
meso-level (intermediary organizations) is involved to get access to actors at the micro-level. The fact that
the system is multi-level is not that new. Special is the way in which the levels communicate, adjust to each
other, produce agreements and implement those agreements. The actors at the meso-level are responsible
and have to use their influence, resources and power towards the actors at micro level. Various programs
contribute to the new strategy. The policy program on environmental management and the target-group
policy are two important elements of it. Where the target-group policy specifies what needs to be done, com-
panies are expected to learn how to implement these requirements via environmental management.
5 Conclusions
In this chapter we have described and evaluated the Dutch policy program on Environmental Management.
To reach for SMEs an indirect, consensual steering model is used in which policy networks play an im-
portant role. Within these networks intermediary organizations (and especially trade associations) are
partners in policy shaping and refining, and in policy implementation. Collaborating with intermediary or-
ganizations and negotiating over implementation formats led to positive results even in a setting of self-
regulation. A lot of specific knowledge that is of use to companies has been developed as a result of the
activities of the policy network. The formation of this network was also a success. Our research has shown
that a real network has been built over the years. Trade associations proved to be the most pro-active and
influential actor in this respect.
We also outlined the context of the policy program. It is closely linked to a well thought-out new environ-
mental strategy. We enumerated some of the developments and characteristics that made the Nether-
lands a pioneer in this. Certainly the fact that the Netherlands is densely populated and facing high envi-
ronmental pressures were important factors. When public environmental awareness grew fast, and seri-
ous environmental incidents were reported, the stage was set for drastic changes. This resulted in a new
policy approach designed to encourage self-regulation by industry.
We should also realize, that the policy program fits closely with the Dutch tradition of neo-corporatism.
And although the policy-program looks at first glance as an examples of self-regulation, it is embedded in
a broader policy mix. This careful mix might be an important success factor. In the end industry might be
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 17
most susceptible to a careful balance between elements of self-regulation, co-regulation and -threatening
with- regulation to overcome deadlocks. Reflecting on the Dutch policy mix it is important to note that it also
offers options for governments to collaborate with pro-active companies while at the same time employing a
strict regime towards laggards. While pro-active companies meet a collaborative government ready for con-
structive dialogue, laggards will be tackled by regulators, and the central government will consider using
direct regulation in a sector if no agreement can be reached in the target group policy. For industry it is
important that there will be no room for free riders and efforts are rewarded.
Our empirical case proves that the new policy approach based on shared responsibility really can make a
difference. We found a positive correlation between the activities of network-organizations on the meso-
level and a positive environmental attitude and the implementation of organizational and technical envi-
ronmental measures on the micro level of individual SMEs. Will this policy approach make the difference
to reach for sustainable production? Will it lead to radical changes within the industrial production sys-
tem? After all, after a decade of intensifying the goals and implementation of environmental policy the ‘low
hanging fruit’ within companies has been picked (De Bruijn, Groenewegen and Grolin, 1997: 175). Some
proclaim that a step-by-step improvement (eco-efficiency) will eventually lead to sustainability (see for
instance Schmidheiny, 1992; Von Weizsäcker, 1997). Assuming that businesses will perceive a growing
pressure (from governments and other stakeholders), companies will be forced to change their production
step-by-step. Especially in developed countries a lot of companies have indeed managed to improve their
environmental efficiency. At the same time economic growth nullifies much of these benefits. The real
challenge for the coming years therefore is in forcing fundamental, structural changes in the production
and consumption system since sustainable development can only be achieved if these types of changes
are realized.
Environmental management as promoted by the Dutch policy program is a clear example of a step-by-step
approach. The goal is to transform patterns of growth into more sustainable ones by de-materializing and
using less fossil fuel (CEC 1993: 55). Decreasing the use of natural resources and fossil fuels enormously
will require the change of whole production chains. Governments alone cannot prescribe such far-reaching
innovations in a permit (De Hoog 1998: 27). In this perspective the long term strategy of Dutch environ-
mental policy is of importance. The sub-programs are not isolated steps but coherent parts of a more or
less well thought out long term strategy. The new policy approach is certainly not perfect. The incisive
question however is whether there is an alternative. We should realize that substantial de-materialization
and re-designing of industries couldn’t be done on a national scale alone for a country the size of the Neth-
erlands. Otherwise there will be ‘international free riders’. However, using the capacity, knowledge and
flexibility of industry might help us to reach for the fruits that are hanging in the ‘middle of the tree’. The
greatest benefit in this approach lies in the regained flexibility. The current policy mix gives some room to
pro-active companies and supports them actively. At the same time the permit system can tackle laggards
and secure developments in other companies. Therefore we feel that the network approach is a promising
new supplement to reach out for SMEs in the context of the slogan the ministry used to promote its envi-
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 18
ronmental management policy: voluntary but not without obligations.
Finally we enumerate some factors that seem of importance for the effectiveness of network approaches in
voluntary and information-based policies:
• Context of neo-corporatism;
The cultural background of our case cannot be denied. For trade associations in the Netherlands for
instance it is to a certain extent normal practice to collaborate with governmental agencies. They
really perform intermediary functions between industry and governments. The formation of the policy
networks was therefore fairly easy, and of course facilitated by the funds available. Network ap-
proaches might be more successful in such a context. In countries where environmental policies are
developed from another policy perspective, examples of neo-corporatist structures (that could be
used) might be found in different policy fields.
• Building of sufficient pressure;
For more voluntary approaches, it seems crucial that the target group perceives changes of behavior
in the long run as unavoidable. This can not be done by running isolated programs but by concen-
trating on a long-term strategy for change in which the program is embedded. The strategy should
foresee in fall back options in case the voluntary approach doesn’t pay off. The level of public aware-
ness also is a key-factor, however not easily manipulated. In an atmosphere where there is wide con-
sensus of the necessity of changes, companies will move more easily in the desired direction.
• The accessibility of the target group;
The set-up of networks deserves some careful attention from the perspective of accessibility of the
target group. Important determinants are homogeneity of the target group, the number of players in-
volved and the existence of a strong representative body that can act and negotiate on behalf of the
group. In our case trade associations proved to be valuable in the policy network. They acted as a
good partner for governments and were trustworthy for the companies involved.
• The problem of free-riders;
'Free riders' should be dealt with. Companies who engage themselves in voluntary programs should
be rewarded one way or the other, especially in cases where there are no direct market or financial
gains foreseen. This does not necessarily imply regulation or a threat of regulation, however a mix of
self-regulation and co-regulation (and if necessary enforcement of regulation) seems essential.
• Building of mutual trust.
Voluntary and information-based policies have an impact that goes beyond a specific program. They
assume that mutual trust and respect develops between authorities and target groups. For this a sta-
ble and clear governmental policy on sustainability is inevitable, as is the handling of 'free riders'.
These recommendations underline our conclusions that on the one hand the Dutch policy program on Envi-
ronmental Management was well thought-out in terms of implementation structure, instrumentation and
content. On the other hand we feel the context in which the program was implemented made companies
De Bruijn and Lulofs: Promoting Environmental Management in Dutch SMEs 19
more susceptible to accepting the challenges in the voluntary program, and thus contributed significantly to
its success.
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